Mr. Dean Sullivan:

I thank the committee for the invitation to attend. I am deputy director general in charge of strategy and planning for the HSE. I welcome the opportunity to discuss the increased costs for the national children’s hospital, an issue which is clearly of significant concern. I am accompanied by Mr. Jim Curran, head of estates within the HSE, and Mr. John Pollock, project director within the National Paediatric Hospital Development Board.

I would like to provide members with an overview of the structures and processes in place and the HSE’s role in regard to the children’s hospital project and programme. The National Paediatric Hospital Development Board was established as an independent board through statutory instrument in 2007. The statutory instrument conferred on the board the functions of planning, designing, building, furnishing and equipping the national children’s hospital in accordance with a brief approved by the HSE with the prior consent of the Minister for Health. The chair of the development board and the 12 board members are appointed by the Minister for Health.

The HSE is the sanctioning body for the new children’s hospital and the associated urgent care centres and is the principal capital funder for the programme, which must be managed within the overall capital plan. The HSE provides funding for the programme based on approved plans submitted by the National Paediatric Hospital Development Board and approved by the Minister.

As outlined to the committee by the Department, in May 2017 the Department of Health set out revised governance structures for the children’s hospital project and programme. The programme board is chaired by the Secretary General and I have been chair of the steering group since May of last year. The responsibility of the programme board is to oversee progress of the project and programme to ensure the programme is delivered against the agreed parameters in regard to timeline, scope and funding. The responsibility of the steering group that I chair is to direct the overall programme of work within agreed parameters and, crucially, to ensure an integrated approach is taken across all the different programme elements. Both the programme board and the steering group include director-level representation from the Department of Health and the HSE. The steering group considers monthly progress reports in regard to the capital project, the integration of the three hospitals, workforce, ICT and other relevant issues. These monthly steering group reports form the basis for updates to the programme board.

As committee members are aware, the procurement process for the national children’s hospital involved a two-stage tender process. This approach was agreed in 2014 with the Government contracts committee for construction. The substructure for the building, that is, phase A, was tendered on the basis of a full design, while the associated tender for the main hospital building, phase B, was on the basis of a preliminary design with an approximate and re-measurable bill of quantities. Consistent with this approach, and following a competitive tendering exercise, the work on phase A was commenced in October 2017 and, in parallel, the second-stage detail design work was initiated to determine the cost for phase B. The outcome of phase B is a cost which is considerably in excess of that envisaged following the initial tender process. As has been noted already, this escalation in costs is of significant concern and will undoubtedly impact on other priority health investments.

An independent review of the escalation in cost in determining the guaranteed maximum price has been commissioned by the HSE in discussion with the Department and commenced this week. This review will examine the contributory factors and associated responsibilities in order that any potential weaknesses are identified and comprehensively and speedily resolved in the interests of the successful completion of the project and the effective management of public resources. This review is expected to be completed in March of this year.

There is no doubt that there is an urgent need for a new children’s hospital to care for sick children and their families in Ireland. The development of the new hospital and the two urgent care centres is central to the implementation of a national paediatric model of care, a model in which children receive the care that is appropriate to their needs, delivered as close to home as possible. That concludes my opening statement. With my colleagues, I am happy to answer any questions the committee may have.